PPC (Production possibility Curve)

Question 1

PPC

Answer 1

A curve representing all combinations of the maximum amounts of two goods that can be produced by an economy, given its resources and technology, when there is full employment of resources and efficiency in production.

Question 2

Actual Output

Answer 2

point within PPC

Question 3

Reasons why an economy cannot produce outside the PPC

Answer 3

• scarcity
• forces choice of either good A or good B
• opportunity cost

Question 3

How can an economy produce on the PPC

Answer 3

• all resources must be fully employed
• all respurces must be used efficiently

Question 4

Economic Growth

Answer 4

Increase of quantity of output produced in an economy over a period of time

Question 5

Actual growth

Answer 5

outward movement within the PPC to a point closer to the PPC

Question 6

Factors leading to outward shift of PPC

Answer 6

• increase in quantity of resources in the economy
• improvements of quality of resources
• technological improvements

Question 7

Growth in production possibilities

Answer 7

Outward shift of the PPc due to inc. Q of resources, improvement of resources quality and technological improvements

Question 8

FOP

Answer 8

Factors of production aka resources
Land = Rent
Labour = Wages
Capital = Price
Enterprise = Profit

Question 9

How to remember what makes PPC shift

Answer 9

she my little QQT 😘

Quality, Quantity, technology

Question 10

How to remeber PPC axis labelling

Answer 10

Cap go to bottom (we dont tolerate capping)